Executive Magazine

Fallen angels

by Thomas Schellen July 2, 2014

written by Thomas Schellen

The final trading week in June demonstrated that markets in the Middle East and North Africa are neither highly resilient nor diversified, despite having greatly advanced since the region’s 2008 immersion into the Great Recession. The best gainer of all MENA stock markets in the 26th week of the year was Kuwait’s KSE Index, which advanced all of 0.6 percent, followed by a 0.4 upward nudge in Oman’s MSM 30.

Across the region, the last trading week before the start of Ramadan was a reminder that equity plays are absolutely no guarantors of rewards in life. From Doha to Casablanca, market investors had to contend with a second consecutive week of index impairments, but for participants in the Dubai Financial Market this remainder struck home in form of a big bad bang as the DFM General Index not only dropped 8.1 percent on the week but also closed the second quarter below 4,000 points on June 30.

In continuing the index losses of the two previous weeks, this meant that the DFM GI closed the second quarter 11.4 percent lower than its value at the end of March, signifying the index’s first harsh quarterly drop since getting on a speedy growth train in the middle of 2012.

In the half-year statistics, Dubai thus dropped to second best climber behind the Egyptian Exchange, whose EGX 30 index ended the first six months in 2014 with a 22.1 percent gain, 2.5 percentage points ahead of the DFM GI. Most other MENA markets ended the period also with gains, with other high risers being Bahrain with 19.4 percent, Qatar with 15.5 percent and Saudi Tadawul with 13.1 percent. At the low end, the Tunisian and Moroccan bourses advanced 5.7 and 4.4 percent. Only the Kuwaiti bourse closed H1 lower, by 4.2 percent when compared with the start of 2014.

For reference, the data pages of index maker MSCI said that its Emerging Markets Index achieved a first-half gain of 4.8 percent in terms of price, while the combined performance of Emerging and Frontier Markets stood at 5.3 percent.

Fall from grace

But even as the regional statistics for the year to date are still impressive in the context of emerging and frontier markets, the recent drop of the DFM GI was as painful as it was embarrassing.

Painful, because the story of the sharp correction in the DFM last month was a reminder that the UAE equities narrative in 2014 is, despite Abu Dhabi’s oil, Dubai’s trade and the UAE’s overall financial wealth, first and foremost about real estate development, just as it was in 2008 and the years before. The market is short on diversification and its up and downside risks have been and still remain tied to property values.

In that sense, the extreme — and in hindsight misplaced — trust in Arabtec, the construction and development holding whose stock triggered the slide in Dubai and even affected other Gulf markets, is almost a necessary aspect of the equities hype that was produced by the resurgence of real estate sales in a narrow development sphere focused on Dubai and Abu Dhabi.

Arabtec was trumpeting its determination to expand to larger scopes and prove itself as a world-level contractor and developer with projects from St. Petersburg, where it signed as a contractor on Europe’s tallest building, to Cairo, where its development unit was signed to erect one million low income homes.

But the UAE was the base where Arabtec had radiated success in executing projects such as the Burj Khalifa, and the marketplace where it had shown off pricey new projects, announced as worth $3.8 billion, as recently as April. The UAE was also the space where Abu Dhabi’s state owned investment fund Aabar was a key stakeholder in Arabtec, while at the same time responsible for awarding Arabtec’s new properties unit with developing a major project in Abu Dhabi.

It took only a minor partial divestment by the state owned fund to trigger the selling frenzy that would reveal the fragility of valuation assumptions that regarded Arabtec as the autonomous producer of its success. All recent signs suggest that the Aabar shareholding — and not Arabtec’s competency — was perceived by the market as the guarantor that the firm could obtain business in local luxury projects where the state, personified by its rulers, is habitually credited as the maker of all big things.

In another sense, the case is hugely embarrassing for anyone who believes that the region’s stock markets are supervised in ways that protect small retail buyers. The governance systems, including supervisory agencies, banks, financial institutions, equities analysts, stock market reporters and regional business media, all failed to voice timely warnings.

Governance stakeholders should alert market participants to unusual developments such as important share trades in a listed company by any executive of that company. Not only did that not happen, but apparently neither did the system stop brokers from enticing clients to buy shares with borrowed money beyond the levels regulators had set as acceptable.

While the Dubai market and its brethren in Abu Dhabi and Qatar were blooming, analysts and those of us in the local and regional media were too busy cheering and did not pay enough attention to the risks — neglecting to share the knowledge of past regional experience that trades in equities are no recipe for risk-free redistribution of wealth.

Lessons of misplaced trust are a universal and recurrent feature of the securities markets experience. All indications are that this latest lesson is still ongoing and will linger for an indeterminable amount of time in the Gulf markets. As the DFM fell by more than 20 percent between May 6 and June 23, some news reports claimed the index had crossed into a bear market.

This description is contestable: by most definitions, a bear market entails a 20 percent downturn over at least two months. This notwithstanding, the developments of week 26 — including the continued panic selling of Arabtec stock and other selling allegedly forced by margin calls — lend themselves to taking a bearish perspective for weeks to come.

This would eventually shape into a full-fledged bear market — unless the counter-expectation of a market stabilization on basis of economic fundamentals bears out. When pondering strategic responses to either possibility, market participants may benefit from expanding their perspective to a broader consideration of emerging markets and markets in general.

Global gains

When compared with the first quarter in 2014, the overall performance of emerging markets in the second quarter was encouraging. Although advancing unevenly, the bourses of numerous emerging markets achieved gains in the year to date and specifically, some of the large markets that dipped in Q1 showed improved performances in Q2.

Mexico and South Africa both had stronger, single digit growth in the second quarter when compared with the first. Malaysia’s benchmark index in Kuala Lumpur advanced 1.7 percent in Q2 and closed the first half up 2.4 percent, year to date. The rising economic behemoth China, home to many of the most watched emerging market stocks, saw the Shanghai Composite Index rise 0.7 percent in the second quarter, putting the market at a year-to-date drop of 1.5 percent by June 30.

During the same period, performances recovered in two important equities markets, Brazil and Turkey. Prime Minister Recep Tayyip Erdoğan’s Turkey recovered currency with markets after his AK Party won municipal elections on March 30. The BIST 100 index of the Borsa İstanbul gained 12.6 percent in the second quarter, departing from a morose first quarter that managed a net gain only it its last week of trading. In São Paulo, which had a lousy first quarter and lost about 13 percent until a turning point in mid March, the Bovespa Index advanced 5.5 percent in Q2.

Political hopes were instrumental in the advance of India’s SENSEX by 13.5 percent in Q2. This was more than double the first quarter’s percentage rate of growth, but the Indian market took off only after results of the country’s month-long parliamentary elections were clocked in early May. Contrary to some expectations, Moscow’s MICEX moved up despite the volatility related to the Ukraine crisis, adding 6.7 percent in Q2.

The country stories from all around the developing world are also reflected in this year’s performance of the MSCI Emerging Markets index, where a downtrend from 2013 carried over into January 2014. A recovery consumed the rest of the first quarter, and the index continued to improve from there. In the long term picture over the past four years, the emerging markets have been rather volatile and subdued in their growth when compared with developed markets.

At the same time, the recent performance of global financial markets and the global economy is no reason for complacency about the financial system, warned the Bank for International Settlements (BIS) in its Annual Report on June 29.

The Basel-based international financial institution that serves as bank to central banks and provides them with policy research said, “The overall impression is that the global economy is healing but remains unbalanced. Growth has picked up, but long-term prospects are not that bright. Financial markets are euphoric, but progress in strengthening banks’ balance sheets has been uneven and private debt keeps growing. Macroeconomic policy has little room for [maneuvers] to deal with any untoward surprises that might be sprung, including a normal recession.”

In order to avoid an entrenchment of risk in the global economy and loss of maneuvering room on policy, BIS said it is necessary to dampen the extremes of the financial cycle via “improvements in policy frameworks — fiscal, monetary and prudential — to ensure a more symmetrical response across booms and busts.”

More robust short term response mechanisms and long term financial policy frameworks, at the potential expense of curbing those exciting short term booms, sound like innovations from which MENA economies and their securities exchanges could also benefit.

But, as the BIS report added, “Few are ready to curb financial booms that make everyone feel illusively richer.”

July 2, 2014 0 comments

Michel Temer in Sao Paulo, Brazil, 20 June 2014.

The most powerful Lebanese person alive

by Joe Dyke July 2, 2014

written by Joe Dyke

This is the first article in a special series on Lebanese successes in Brazil. Read the rest as they are published online over the coming weeks, or pick up a copy of the entire special report in Executive’s July print edition.

Most days, Btaaboura is a soporific place. The north Lebanese village is home to only a few hundred residents, many of whom have long-since retired. On any given afternoon the hot topics of conversation are likely to be the weather, the neighbors and perhaps the renovations.

Yet if you happened to pass by on a late November afternoon three years ago, you would have been excused for thinking it was the center of the country. Processions of people waited by the roads as a cavalcade drove in, flanked by helicopters and endless security details. The media’s cameras were not far behind.

For on that day, a long-lost resident returned, and he was not just any old traveller. As vice president of Brazil, a country of nearly two hundred million people and the world’s seventh largest economy, Michel Temer has a strong claim to being the globe’s most powerful politician of Lebanese origins. Indeed when he met with President Michel Sleiman on that same trip, the Lebanese president joked about his own inferiority. “He said ‘you are more president of Lebanon than me as you have eight million, we have five million!’” Temer says, referencing the huge Lebanese–Brazilian population.

On that day, several hundred residents were treated to lunch outside where, in true Lebanese fashion, the guest was forced to eat far beyond his capacity or desire. “They keep putting it on your plate and you have to eat it,” Temer recalls with a wry grin.

[pullquote]In the end the four eldest worked, while the youngest quartet all trained as lawyers.[/pullquote]

Struggle and sacrifice

The story of Temer’s family is, like so many immigrant tales, one of sacrifice. Moving from Btaaboura to São Paulo in the mid–1920s, his young parents (who had married at just 18 and 14) already had three children. Temer was to be their eighth, and last, of their offspring.

Like many first generation immigrants, the Temers took to manual work — setting up a small farm and shop in a small town in the state of São Paulo in hope of a better future for their children. “My father always said that Brazil is the place to ‘make America,’ and by ‘make America’ he meant the place to grow — to prosper,” Temer says in his luxurious tenth floor office in central São Paulo. Yet it soon became clear that his father’s chances of making enough to support such a large family were limited, so the eldest children were commanded to abandon their hopes of education in favor of their younger siblings.

His oldest brother was reticent and in his mid-teens ran away to take the exams for medical school. Much to his surprise, he got in. Congratulations, his father said, but it was not enough — the family needed him to help bring up the younger ones. “He was one of the smartest [but] he dedicated his life to working with trade — helping my father so that me and the others could study,” Temer recalls. In the end the four eldest worked, while the youngest quartet all trained as lawyers.

With the pressure born of this sacrifice, Temer studied hard at university — becoming involved in university politics early on. It was a revolutionary time for the country’s youth — in 1964 a coup d’état brought the military to power. Angry young movements sprung up to fight back, with current President Dilma Rousseff among those that resorted to radical means — eventually being jailed for alleged guerilla activities. Temer was also resisting but more passively — becoming increasingly involved in student politics.

A talented graduate, he started working in the legal field. By 1983 he had risen to become attorney general of São Paulo, the following year being appointed secretary of public security for the city. Yet it wasn’t until 1986 that his political career began in earnest — winning a seat in the country’s parliament which he still holds. The military’s twenty-year rule had collapsed the year earlier and Temer remembers an exciting time. “It was a moment of vitality because we were recovering our democracy. Because I was an expert in constitutional law I played a big role in rebuilding democracy in our country,” he says.

Two decades of work in politics followed, initially becoming speaker of the parliament and later head of the Brazilian Democratic Movement Party (PMDB) — currently the country’s second largest. It was when they became the junior partner in the government led by Rousseff in late 2010 that Temer was called upon to play his most prominent role yet.

Trading on his roots

One of his roles in the current government is as head of Brazil’s policies toward the Arab world — particularly in terms of trade. Since the 2005 formation of the Summit of South American–Arab Countries under the government of then-President Luiz Inácio Lula da Silva, trade between the two regions has blossomed. In 2012 Arab–Brazilian trade reached $25.11 billion, up 3.26 percent on the previous year and around $11 billion a decade earlier. Raw materials form the bulk of Arab exports, while Brazil sells food exports and other goods.

Yet trade with Lebanon has remained relatively limited. Temer believes this can change in the coming years. “Our ambassadors are always in close contact — the Lebanese ambassador in Brazil and the Brazilian ambassador in Lebanon,” he says, without providing more detail. Among the companies he was lobbying for during his 2011 visit was the Brazilian state oil company Petrobras, which has applied for the right to bid on Lebanon’s nascent offshore oil and gas sector. Yet with the bids delayed by Lebanese political wrangling and Petrobras hit with a series of corruption allegations, Temer admits a deal is currently unlikely. “Petrobras went through the pre-qualification stage. It is still ongoing but because of Petrobras’ interests abroad it wasn’t possible yet.”

[pullquote]“If the economy were not going well, [this would mean] it would affect the industrial sector and there would be unemployment — but we don’t have unemployment.”[/pullquote]

Only anger growing

Temer says the achievement he is most proud of in office is cutting Brazil’s poverty rates. He argues that under his government and the previous one, Brazil’s economic growth has enabled 40 million people to be lifted out of poverty. “Now [the 40 million] are part of the middle class, granted the lower middle class, but they are not in poverty anymore,” he says.

Yet after a decade of rapid growth, recent years have been tougher for Brazil and its government. In 2010 growth was nearly 8 percent, but that has fallen to around 1 percent last year. Inflation is high, while a series of strikes have crippled the country and reduced confidence.

Temer, whose government faces an election at the end of the year, believes the fundamentals are strong. “There is much talk about the economy not going well but the truth is the daily economy is going well,” he argues. “If the economy were not going well, [this would mean] it would affect the industrial sector and there would be unemployment — but we don’t have unemployment.” He is right that unemployment — currently measured at 4.9 percent — has actually fallen from 6 percent last summer, according to the Economist Intelligence Unit. “Confidence is very high in our country. The government is taking steps to boost the industrial sector and to improve foreign investment.”

The ongoing World Cup, he says, is a sign of Brazil’s “prestige growing internationally,” as are the forthcoming Olympic Games in Rio — despite the ongoing protests that have at times threatened to overshadow the football tournament.

Yet far from signalling a lack of confidence in the Rousseff government, Temer believes these protests are a sign of a maturing political climate. “We have a theory about these protests. Since the reinstallment of democracy with the constitution of 1988 we have lived through three different phases of democracy,” he says. The first was liberal democracy in which freedom of expression was installed, but there was little support for the country’s millions of poor. In the second they moved towards social democracy — “bread on the table,” Temer says. “This is what allowed these 40 million people to have social [mobility].”

The third phase, he says, is efficiency of services — both in the public and private sector. “A few years ago you would call a private company and they would keep you on hold for half an hour. Nowadays people don’t accept this. We have entered a third phase which is efficiency. This is what the people are demanding in the street and what the government is responding to,” he says.

While Brazil will remain his priority, Temer is deeply proud of his Lebanese roots — which he says helped him achieve his goals. In particular he thinks the “fraternity” and close-knit family ties within Lebanese communities help create strong individuals. This, he says, was signified by the fact that the statue erected by the residents of Btaaboura for his visit on that brisk November day was not of him, but his father. “Miguel Temer, father of the vice president of Brazil,” the sign below it read.

July 2, 2014 2 comments

Shot of the Christ the Redeemer monument in Rio de Janeiro, Brazil

Lebanese in Brazil Society

Living the Brazilian dream

by Joe Dyke July 2, 2014

written by Joe Dyke

The world is watching Brazil. With the World Cup only two weeks from completion, a spotlight has been shone upon Latin America’s largest country. It is a rising force — the world’s seventh largest economy may have slowed down but it is far from dipping into decline. In 2016 it will also host the Olympic games.

Yet the role of the Lebanese in the emergence of what will surely prove to be one of the 21st century’s giants has too often been forgotten. While Lebanon itself continues to struggle — seemingly bouncing from crisis to crisis — the 6–8 million strong Lebanese diaspora in Brazil have gone from strength to strength.

As our historical analysis shows, since the first Lebanese migrants found their way to Brazil’s shores in the late 1800s, they have risen over several generations from the most basic of tradesmen into some of the top jobs in various professions.

This special report aims to introduce the diaspora outside of Lebanon to the Lebanese inside. We will meet some of the most influential Brazilians — from construction giants to cultural leaders, from top judges to top explorers. Among these interviewees is none other than Michel Temer — Brazil’s vice president and quite possibly the most powerful person of Lebanese descent in the world.

INSIDE THE REPORT:

– Historical overview: How the Lebanese conquered Brazil

– Can Lebanon attract more Brazilian investment?

– A home for everyone: Lebanon can learn from Brazil’s attitude to immigrants

– In depth: Michel Temer, the Brazilian Vice President

– In depth: Francisco Rezek, former Supreme Court judge

– In depth: Amyr Klink, Latin America’s Indiana Jones

Success stories:

– Milton Hatoum, the writer

– Denise Milan, the artist

– Jorge Takla, the theater director

– Henry Maksoud-Neto, the hotelier

– Ana Estela Haddad, the anti-poverty campaigner

– Fause Haten, the designer

– Gustavo Chacra, the journalist

– Samir Yazbek, the playwright

– Ernesto Zarzur, the construction kingpin

Read the rest of the articles from the special series on Lebanese successes in Brazil as they are published here over the coming weeks, or pick up a copy of the entire special report in Executive’s July print edition.

July 2, 2014 0 comments

The Arch, the Harbourside Building, and the International Commerce Center in Hong Kong, China

Finance

Shaky hopes

by Thomas Schellen July 1, 2014

written by Thomas Schellen

Of $1.45 trillion in Foreign Direct Investment inflows in 2013, more than two thirds were directed at 42 developed and 10 developing countries. According to the 2014 World Investment Report released last week by UN trade and development body UNCTAD, $566 billion FDI went into developed economies, by which the organization means 30 of 34 OECD countries plus 11 non-OECD European countries, and Bermuda.

While $778 billion of FDI inflows targeted developing economies, $529 billion or 68 percent of that amount flowed into only ten countries. China, when viewing the mainland and Hong Kong together, swallowed $201 billion, or almost 14 percent of the global FDI total. Another $108 billion targeted ‘transition’ economies — those between developing and developed.

In terms of FDI originations, or outflows, the global total reached $1.41 trillion in 2013, with the lion’s share of 61 percent emanating from developed economies. Both FDI streams showed single-digit percentage gains when compared with 2012 but remained about 15 percent below 2011 figures.

All four original BRICs were among the top twenty countries for FDI inflows in the 2014 report, but India trails the other three. With inflows of $28 billion in 2013, India was separated by a substantial margin — $36 billion — from Brazil and by almost $100 billion from the People’s Republic of China (without Hong Kong). In terms of FDI outflows, only China and Russia were among the top 20.

The most needy and vulnerable economies on the other hand attracted $57 billion or 3.9 percent of global FDI. This group comprised well over 80 nations which are classified as either least developed (LDCs) or as landlocked developing or small island developing countries (with overlaps between the 49 LDCs and the two other groups).

Lebanon, for those who are concerned, is part of the developing countries bracket and not specifically addressed in the WIR beyond being identified as a country that was among five West Asian countries that drew in between one and five billion dollars in FDI in 2013 and among another set of five West Asian countries that produced less than $1 billion each in FDI outflows. Other than that, the WIR dedicated exactly one sentence to the country of the cedars, saying, “FDI to Lebanon is estimated to have fallen by 23 percent, with most of the flows still focused on the real estate market, which registered a significant decrease in investments from the Gulf Cooperation Council (GCC) countries.”

The point most worth noting is perhaps that the estimated drop in Lebanese FDI inflows is not necessarily as incisive economically as its size suggests because the FDI targets were in real estate, not in industry or other productive sectors. And for Lebanon in particular, FDI — or its absence — in the current economic cycle may have fewer implications than for most other countries when compared to other forms of financial interactions such as remittances and foreign deposits in the banking sector.

The bigger worries

The question remains how the current state of global investments offers an “encouraging trend” in the view of the WIR’s authors, specifically one that meshes with the lead idea attached to the report, which relates to the private sector’s role in achieving global development goals.

In a sentence signed by UN Secretary General Ban Ki-Moon, “This year’s World Investment Report offers a global action plan for galvanizing the role of businesses in achieving future sustainable development goals, and enhancing the private sector’s positive economic, social and environmental impacts.”

As the Millennium Development Goals (MDGs) are approaching the end of their shelf lives in 2015, the UN is reissuing these goals as Sustainable Development Goals, or SDGs. The WIR cites the SDGs as pertaining to “poverty reduction, food security, human health and education, climate change mitigation, and a range of other objectives across the economic, social and environmental pillars.” The timeframe for tackling these familiar objectives is the period from 2015 to 2030.

According to WIR estimates, implementation of SDGs in developing countries will require somewhere between $3.3 trillion and $4.5 trillion annually, a somewhat broad range in both absolute and percentage terms. The estimated need covers five vast areas: basic infrastructure, food security, health, education and climate change.

Although MDGs have been pushed since their adoption by the global community in 2000, the world faces a $2.5 trillion annual funding gap for implementing the relevant investments in developing economies under the SDG moniker, the WIR says. Private sector involvement will propel infrastructure and other investable areas with SDG relevancy in some emerging and developing markets. On the other hand, the countries where FDI inflows are lowest, investment returns uncertain and private sector risks are often incalculable — namely the LDCs and other highly vulnerable countries — dependency on foreign aid will remain overpowering.

Private sector investments could play a positive role in propelling SDGs toward fulfillment in the most vulnerable and needy countries, the WIR suggests: “A target for the promotion of private sector investment in SDGs in LDCs could be to double the current growth rate of such investment.” Even then, however, it estimates that public funding and foreign aid would have to treble by 2030 from current levels to achieve SDGs in LDCs.

The language of development reports is generally incapable of conveying the realities of the affected nations and their citizens — who are basically the world’s poorest 15 percent with annual per capita gross national incomes of less than $1,000 — when their existentially necessary developments entail funding needs for that exceed their economic capabilities on practically every front.

Given the spotty track record of the past 15 years, where advancements to MDGs were strong in some regards and disenchanting in other aspects, it bears to note that the WIR sees the importance of private sector investments for tackling the SDGs. The report in this respect seems not to fully trust in its own headline optimism, however, and says, “Without higher levels of private sector investment, the financing requirements associated with the prospective SDGs in LDCs may be unrealistic.”

That does sound like a huge understatement.

July 1, 2014 0 comments

Business

Garden empire

by Livia Murray July 1, 2014

written by Livia Murray

The urban Middle East is perhaps better known for its dusty cities than for its flora. But Lebanese design and technology company Green Studios is carving out a garden empire one building at a time thanks to a patented technology that allows vegetation to grow on walls and on rooftops under regional climate conditions. Since they founded the company in Lebanon in 2009, their concept has begun to take root in the Middle East and North Africa region, and they have plans to bring their gardens across the Atlantic.

[pullquote]in their system, plants can survive without water for up to three days in harsh environments such as deserts, and as much as a week in milder environments.[/pullquote]

Into the foliage

In hot climates such as the Gulf, growing greenery is tough business. With the brutal heat necessitating an abundant supply of water in order for plants to survive, growing a garden is a rather unsustainable endeavor. “We wanted to develop something that is applicable to super-hot [climates],” says Jamil Corbani cofounder and CEO of Green Studios. Together with cofounders Zeina Kronfol, a landscape architect, agriculture engineer Oliver Wehbe and architect Marc Abihaila, they set out to find a way for plants to grow in the desert.

Green Studios uses hydroponics, a technique of growing plants without soil in a mineral nutrient solution, which creates a multi-layered skin allowing the flora to grow on rooftops and walls. Hydroponics reduces the quantity of water needed for plants to grow and Corbani boasts that in their system, plants can survive without water for up to three days in harsh environments such as deserts, and as much as a week in milder environments.

There is a smart component to their technology. Each layer of the skin is distinct in function, with the core layer acting as an irrigation network, explains Corbani. The skin reacts to the outside temperature and distributes water and nutrients as needed. “It contains sensors and nano-sensors that measure humidity, temperature, acidity, electro conductivity and stuff like that, that are vital to plants’ health,” he says. The sensors transmit data to an electrical board which directs pumps to go on and off, pumping water and nutrients into the sponge.

The green innovators got their first patent for the skin in Lebanon in 2011, and according to Corbani are in the process of receiving patents in the United States for the updated version of the skin and system, which they are registering as different parts, and which they believe will provide better protection internationally than their patent filed in Lebanon. Besides having filed these two patents in the US, the company has another three or four ready for filing, according to Corbani. He claims that they intend on applying for new patents in the States as they continue to innovate.

To support their push toward innovation, they are in the process of opening a new SAL company, which will focus on the technological side of the operations. To be named Global Dispatch, it will fall alongside the original Green Studios — which will continue to create new designs — under Green Studios Holding, which is to be the second new addition to the family. Corbani anticipates that Global Dispatch will play an important role for the company in the US in the future.

A waterfall of greenery

Rise of the plants

Since their beginnings five years ago, Green Studios have clambered from a startup to become a visible presence both in Lebanon and in the region. When Executive last profiled the company, they had just submitted a bid to design a green roof for the Banque du Liban’s Hamra headquarters, a project commissioned jointly by BDL and UNDP-CEDRO, the United Nations Development Programme’s Country Energy Efficiency and Renewable Energy Demonstration Project for the Recovery of Lebanon. At the time of winning the BDL pitch, Green Studios had between eight and 10 projects in Lebanon, now up to a current 30 projects, six of which are in the region.

The BDL project, completed in 2013, brought them serious credibility under the watchful eye of the UN. “You had the whole of the UN body evaluating you on all levels – technically, everything. So we got an excellent score from the UN.” Green Studios were also selected to become part of Endeavor’s network at the 52nd International Selection Panel in Indonesia last February.

Besides building their reputation with international organizations, the company achieved tangible successes both locally and in the region. In Lebanon, recent achievements include their nomination by Herzog & de Meuron, a Pritzker Prize winning Swiss architectural firm, to install a green wall for Beirut Terraces. They have also been granted a project to build a green wall for residential project Raouche 1090 which Corbani claims will be the biggest outdoor green wall in the Arab world. Regionally, they have executed four projects in Cairo since 2013, amongst them a project with Egyptian holding company Raya Corporation, which is listed on the Egyptian stock market. They are currently pitching for dozens of projects around the region, but since these deals have not been closed, Corbani could not go into the details.

Green Studios’ revenues had grown to almost $700,000 by the end of their 2012-2013 fiscal year (ending in August) according to Corbani. This was up by 49 percent from the revenues they made at the end of their second year, of $471,000 in 2011.

The current shareholders are the four cofounders and two other team members. The ownership is scattered: cofounders Corbani, Abihaila, Wehbe and Kronfol at 48, 20, 10 and 10 percent respectively, with Karim Corbani at 9 percent and Rawan Zarour at 3 percent. They are looking for a round of angel funding for their expansion in the Arab world to the tune of $1.5 million, according to Corbani, which will dilute the shareholder base.

Futuristic vision

Corbani was perhaps most excited when he spoke about the company’s planned expansion into the US. To inaugurate their shy expansion into the US market, they will be exhibiting at the American Society of Landscape Architects’ annual meeting and expo in Denver, Colorado, in November. “We are going to look at other players, what are they doing, get a feel of the market, and exhibit as well, who we are, what do we do, what is our philosophy, what is our product, and our patent.” According to Corbani, they plan on leveraging their growth in the Arab world to inject more capital into their business in the US.

Though he acknowledges that Green Studios has a few competitors in North America, Corbani is confident that there will be space for the company. “The market is still virgin, there is room for more players to come.” Moreover, the CEO seems convinced of the inherent worth of Green Studios’ technology. “What we have in hand is something completely … it’s the future. By all means, it’s the future.”

July 1, 2014 0 comments

Football fans watch a World Cup game at Al Falamanki

The Buzz

Where to watch the World Cup

by Nabila Rahhal June 30, 2014

written by Nabila Rahhal

There are many factors to take into consideration when choosing a venue for World Cup viewing. The size of the screen, arrangement and comfort levels of the seating, the venue’s promotions and general ambiance are all crucial criteria.

To take some of the weight off, Executive has done the groundwork and compiled a list of venues where World Cup viewing promises to be a rewarding experience.

Pop-up venues

For those who want the game and no distractions, the World Cup parks are ideal.

Beirut Fan Village at Beirut Waterfront boasts a VIP section with a capacity of 200 and its own high resolution LED screen (entrance $20), a regular bleacher style section which fits 400 people (entrance $7) and has two high definition LED screens and a food court section with outlets like Snack Faysal and Pinkberry ice cream, with Check Point Charlie manning the bar. The food court also has a pizza place, a sushi restaurant and its own screen where one can enjoy the match while dining. Mascots, giveaways, daily promotions and occasional fireworks all ensure a festive experience.

Dbayeh’s Sport Zone is organizing “3ish Mondial” (live the world cup), a fan park featuring five large screens, halftime entertainment, bets and daily predictions for the risk takers.

For those who don’t want to sacrifice their rooftop bar evening, Downtown’s Capitole is projecting the game on big screens viewable from just about anywhere in the bar and is fostering a healthy competitive spirit by identifying each table’s chosen team with a national flag. Flags of the night’s competing teams will be on display as well.

For those who do not venture out of Hamra, Garcia’s is playing the World Cup with all its live commentary glory in their outdoor seating areas. Those sitting inside can still watch the games while listening to the DJ’s music.

Clé Restaurant and Bar is going all out for the month, airing the games on a 200-inch screen in their garden while those sitting indoors can watch the games on the five screens spread indoors. Clé promises “nice surprises at halftime,” and a fun mood created by different promotional items and theme nights depending on the competing teams.

For those who are looking for a good deal on their alcohol for the game, the Hilton hotel’s Pool Bar has open beer and a plate of nachos for $29, while Nu Cocktail Bar in Uruguay Street offers its menu items for half the price during the 7 p.m. matches. Casper & Gambini’s also has a set menu including classic sports food fare such as nachos and chicken wings.

World Cup at Greedy Goose Monot during the game of Brazil vs Croatia

[/media-credit] World Cup at Greedy Goose in Monot

Loyalty to a team first

Some may want to extend team loyalty to their choice of venue. Uruguay Street’s Check Point Charlie with its German motif décor is a natural choice for supporters of the German national team while La Piazza restaurant in Sodeco proudly displays a huge Italian flag on its entrance. Uruguay Cocktail Bar goes the extra mile and offers free shots whenever the Uruguayan team scores a goal.

And finally for those who are looking to escape all the World Cup hype, and yet still want to enjoy a quick drink or a cup of coffee, Le Gray Hotel is not airing the games so a drink in their rooftop bar Cherry on Top could be the solution. Penelope cafe in Badaro is another safe haven for coffee drinkers.

June 30, 2014 0 comments

World Cup at Beirut Fan Park Italy vs England

The Buzz

Broadcasting the World Cup

by Nabila Rahhal June 30, 2014

written by Nabila Rahhal

Watching sports is often a group activity and viewing the World Cup in Lebanon is certainly no exception. Every night since the onset of the games, crowds gather around TV screens, at home or in commercial venues, and loud cheers mixed in with the occasional firework are a common celebratory occurrence.

World Cup fever strikes the country at full force every time, and commercial venues once again find themselves in the familiar position of first trying to lure viewers away from the more cost-effective home gatherings, now that the games are being aired for free, and to attract them into their venue as opposed to competitors.

Success of pop-up venues

Keeping in mind that the broadcasting rights’ contract for commercial venues is different than the home viewing deals and comes with a much heftier price tag — starting at $3,000 and going up to $20,000 according to Mohamad Al Khatib from MK Electronics which supplied most commercial venues in Beirut with the beIN satellite receiver — one has to wonder if this investment is a wise one, and if hospitality venues will get a good return for their buck.

One type of commercial venture that is successful in capitalizing on the football hype is that of the pop-up venue constructed especially for World Cup viewing, such as Beirut Fan Park (BFP) in Beirut Waterfront or the Hyundai Football Village in Zaitunay Bay. Such ventures typically recreate the feeling of watching the games live through stadium style bleacher seating, huge LED screens and half-time entertainment such as mascots or cheerleaders. Loud and fiery, they are favored by diehard fans or by those looking for a change from restaurant viewing.

Entry fees start off at $7, depending on the park, and can reach up to $20 toward the final games. Organizers rely on sponsors to cover most of their investment; Hadi Hibri, one of the partners in VII Management which is organizing BFP, says they invested over $300,000 into the park including the broadcasting rights — but that sum was mainly covered by their 30 sponsors, and the park itself was “supported by Solidere.” Hibri explains that they also rented out the spaces in their food court to a variety of eateries at a fixed price, thereby increasing their profit margin as well. Solicet, the team behind Zaitunay Bay’s park, also lists around a dozen sponsors and supporters who covered most of their event’s fees.

World Cup parks also aim to increase pedestrian traffic in the surrounding area. Amal Khoury, communication manager at Zaitunay Bay, says they offered the venue to Solicit because “we were interested in the footfall to encourage the restaurants’ business and to allow those who don’t want to be in a restaurant to view the games in the public areas of Zaitunay Bay.”

[/media-credit] World Cup at Clé, Hamra

Nil-nil for some restaurants and bars

Meanwhile, restaurants and bars have mixed feelings regarding the season’s impact on their venues, acknowledging the increased footfall but saying that it’s generally not matched with a significant increase in revenue.

Charlie Freim, owner of Garcia’s in Hamra and Central Station in Mar Mkhayel, sees screening the World Cup as an added value service he provides his customers which doesn’t make extra profit during the World Cup season; in fact he makes around 30 to 35 percent less than the usual average when the place is full. “People generally tend to consume less during the games and focus more on beers and appetizers rather than cocktails or meals. Also, many times it is just men alone who come to watch the game so they spend less than when they come with a group that has women,” explains Freim.

Turnover is also lower during the games. For Toni Rizk, CEO of Tri Concepts which runs several pubs on Downtown’s Uruguay Street, many customers spend over three hours in the venue over just a couple of beers.

Faced with this situation, many bars and restaurants are offering set menus of drinks and appetizers, or discounts and promotional items, in an effort to both build hype around their venues as the place to be during the World Cup and ensure at least a minimum order, which would go toward covering their cost.

Other venues cover part of their World Cup investment through sponsors; Creditbank sponsored the broadcasting rights fees for Casper & Gambini’s for example. None of the venues Executive spoke to opted for minimum charge strategy as that would drive viewers away.

However, all restaurants and bars Executive spoke to said that it would not be viable for them not to air the games while their competitors are doing so right next to them as that gives others an edge over them. “We show the World Cup because not doing so means that our customers would choose to go elsewhere during that period,” says Rita Saati, marketing officer at Roadster’s.

The world’s carnival

Ussama Makarem, CEO of Clé Bar in Hamra, feels that broadcasting the World Cup would not make mathematical sense for smaller venues as people generally choose to watch the games in larger venues and so their returns won’t add up. However, for Clé, which has a seating capacity of 120, Makarem says he would be losing profits and clientele if he didn’t air the games.

Despite the claims of flat profit margins, many venues report that footfall does increase during World Cup month, especially during weekdays when people are normally more inclined to stay at home rather than go out.

Speaking for The Peninsula in Dbayeh, Maryse Tebcharany says they have been fully booked since the opening match and have had to “reject tens of reservations each night to maintain quality.”

Capitole Rooftop Bar in the downtown area has noticed an increase in both the numbers of reservations and in the number within the reserving groups. “Before the World Cup, we used to get reservations for groups of maximum six or seven. Now we get reservations for groups of around ten to fourteen in our dinner section because people like to watch the World Cup in big groups while having a bite,” said Capitole’s marketing manager.

As the World Cup carnival rolls along, it seems that the hospitality venues should avoid focusing on the profit lines and just enjoy the games. “This is one of the biggest events on Earth: you have the most people who watch it all over the world and it happens once every four years, spread over 31 days. I personally enjoy festivals and think it’s also nice to have a good time,” says Makarem.

June 30, 2014 1 comment

Finance

A Mediterranean affair

by Livia Murray June 27, 2014

written by Livia Murray

June 11 saw €121 million ($164.7 million) of European Investment Bank (EIB) financing extended to the Lebanese private sector in four transactions.

Two of these came via loans worth €45 million ($61.3 million) apiece to Byblos Bank and Fransabank. The other two were equity investments, one of €11 million ($15 million) in First National Bank and the other €20 million ($27.2 million) in regional private equity fund EuroMena III.

“It seemed important to us in this difficult period to show that the Lebanese financial sector and the Lebanese economy represent a good investment opportunity,” says Philippe de Fontaine Vive, the vice president of the EIB.

The loans to the local banks are to be channeled into the economy at a multiplier effect of two to support lending to SMEs, according to de Fontaine Vive. “We request the bank to lend double of what we are lending to the bank. So it’s a legal commitment of at least two, but nothing prevents these banks from being even more efficient,” he says. The SMEs to be invested in would be held to certain good governance principles, overseen by the EIB, according to de Fontaine Vive.

With a 12-year maturity granted to the commercial banks, they are also expected on their side to lend for periods up to 12 years, according to the vice president — maturities he claims are hard to find on today’s market. As far as interest rates go, de Fontaine Vive says these have not yet been set and will partly depend on the terms set between the banks and the SMEs.

EIB’s relationship with Lebanon

The financing falls under a long-standing EIB policy of promoting the EU’s policy objectives overseas under its Facility for Euro-Mediterranean Investment and Partnership (FEMIP). According to the EIB’s website, these objectives are encouraging the modernization and liberalization of economies of the EU’s partner countries in the Mediterranean.

FEMIP’s financing to Lebanon reached €740 million ($1 billion) between 2002 (the date of its establishment) and 2012, according to a 2013 Byblos Bank report. This is equivalent to 5.2 percent of its investments in the Mediterranean region, which totaled €14.2 billion ($19.3 billion) in the same period, in Morocco, Egypt, Tunisia, Syria, Israel, Lebanon, Algeria, Jordan and the West Bank and Gaza, the report said.

Some of the agreements signed most recently represent just another facet of these institutions’ long relationship with the EIB. Byblos Bank received two prior loans from the EIB — $60 million in 2005 and $87 million in 2007, according to a Byblos Bank press release.

Similarly, this is the third equity investment the EIB makes in an equity fund managed by the Capital Trust Group. The €20 million ($27 million) investment in EuroMena III was preceded by $17 million in EuroMena II and $12 million in the first EuroMena fund.

Rare, however, is the FNB investment, which according to de Fontaine Vive is the EIB’s first significant equity stake in the capital of a Lebanese bank. Like the other financial institution, FNB intends to establish a long-lasting relationship. “In this transaction what we value more is the strategic partnership,” says Rami El Nimer, chair and general manager of FNB. The EIB’s financing will play into FNB’s capital increase of $40 million, $25 million of which will be coming from existing shareholders, according to Nimer.

The perks of international money

Funding from foreign financial institutions certainly has its perks. In EuroMena’s case, their relationship with the EIB and the reputation they’ve gained from it has facilitated subsequent investment. With their third EuroMena fund raising $100 million so far, the $27.2 million EIB investment was the largest investment among a pool of international financial institutions, which invested a combined total of $56 million in EuroMena III. Other investors in this pool included the DEG (Deutsche Investitions- und Entwicklungsgesellschaft), the International Finance Corporation and Électricité de France.

“The EIB, DEG and IFC are as important because they are development financial institutions that do a very thorough due diligence before they invest in a fund. They impose on a fund very tough, thorough controls because it’s public money. And they don’t mess with public money,” says Romen Mathieu, managing director of the EuroMena fund at the Capital Trust Group.

Having already raised $100 million for their third fund, Mathieu was confident that having such investors under their belt would facilitate meeting their closing target between $150 million and $200 million: “When you have such investors with you, other investors come along.”

June 27, 2014 0 comments

Comment

Enabling the economic phoenix

by Nicole Purin June 25, 2014

written by Nicole Purin

In his 2003 book “The law of insolvency,” Ian Fletcher writes “commercial morality, and respect for the rule of law, may be said to constitute the very bedrock upon which the law of bankruptcy is founded.”

The development of an efficient, transparent and foreseeable insolvency system is arguably at the center of a country’s economic advancement. The globalization of businesses is an unstoppable phenomenon, and its key feature is that it requires a highly effective risk management process that can only crystallize if a country has implemented a modern and clear insolvency law framework. Such a regime enables businesses to grow systematically and facilitates the rescue of valid enterprises, promoting innovation, entrepreneurship, safety for investors and market stability.

Since the 2008 global financial crisis, insolvency regimes around the world have been tested and scrutinized. The MENA region, and in particular the United Arab Emirates, have been examined, and many commentators have argued that reforms are needed in order to modernize existing insolvency regimes, which are viewed as archaic and misaligned with the current economic realities.

[pullquote]The main problems with the [UAE’s] current regime are that there is no specific definition of bankruptcy and the legal structure is fragmented[/pullquote]

UAE insolvency legal framework

Winning the bid for Expo 2020 has put the UAE in the global limelight. As more and more investors look at the country as one of the main international hubs for finance and entrepreneurship, the vestiges of the financial crisis add uncertainty. During the crisis, the number of insolvencies increased dramatically and the UAE’s existing legislation faced numerous challenges.

In the World Bank’s “Doing Business Report 2014,” the UAE is ranked 101st for resolving insolvency matters — behind Azerbaijan, Togo and Senegal — and 98th for protecting investors, although it is ranked 23rd in relation to doing business. According to Arabian Business, the statistics are as follows: “It takes an average 3.2 years to resolve an insolvency issue, compared to the Organization for Economic Cooperation and Development’s average of 1.7 years, and the recovery rate is 29.4 cents on the dollar, as opposed to 70.6 cents in the OECD countries.”

Two of the main points of controversy have been the treatment of debtors, who have been jailed for bounced checks or forced to flee the country, and the failure to salvage companies that may have been restructured effectively. In addition, the dispute resolution process is very lengthy and the distribution of assets to creditors lacks the required certainty dictated by international standards, as expressed by top entrepreneurs. There is a strong view that institutional infrastructure needs to be developed further. As a result, in 2013 it was declared that a new insolvency framework was in the making and would be implemented, which hopefully will address the criticisms and allow for the establishment of a world class institutional infrastructure.

Current regime

The founder of Virgin Group Richard Branson said in an interview with Arabian Business on February 15, 2014: “I’m flabbergasted to hear there’s no bankruptcy law in the UAE.”

Currently, there is no specific UAE insolvency legislation. The relevant provisions covering bankruptcy are included in the Civil Procedure Code Federal Law No. 11 of 1992; the Commercial Companies Law, Federal Law No. 8 of 1984; the Evidence Law, Federal Law No. 10 of 1992; and Book 5 of the Commercial Transaction Law, Federal Law No. 18 of 1993.

The main problems with the current regime are that there is no specific definition of bankruptcy and the legal structure is fragmented. From a practical perspective, the courts have been more inclined to opt for liquidation and are reluctant to use the many fractional provisions. In addition, the concept of business reorganization is unknown, and there is no appeal mechanism for dissenting creditors. The lack of experienced bankruptcy courts and regulation of insolvency practitioners, as well as the unpredictability of decisions, all highlight the systemic weaknesses. Specifically, although the freedom of contract principle is embedded in UAE law, it is a common fact that the UAE courts may, on the grounds of public policy and morality, disapply the foreign laws. In fact, most restructurings since the 2009 global financial crisis have been resolved outside the courts. The Dubai International Financial Center and London Court of International Arbitration are becoming options that may offer greater reliability.

The new regime

The new draft insolvency law is modeled on French bankruptcy laws and is at present under review, while the public is hoping for a swift implementation. The objective of the law is to modernize the existing regime and shift the focus from a creditor-friendly establishment to a more debtor-friendly regime. It is also designed to be more flexible and transparent, and aims to safeguard the interests of businesses, the economy and creditors. The new law seeks to implement a swifter process of insolvency resolution than that carried out through the courts, with the establishment of an independent commission.

One of the main criticisms of the existing system is that it did not protect either debtors or traders sufficiently, nor did it allow for the restructuring of businesses or address the issue of ‘small bankruptcies.’ The sphere of the new legislation is designed to be wider — although it carves out the international financial zones and focuses on companies and juridical persons.

Notable provisions are (i) a streamlined bankruptcy process for small bankruptcies; (ii) rescue provisions for non-trading individuals; (iii) simplification of set-offs; (iv) regulation for bankruptcy experts; (v) facilitation of debtors’ and creditors’ arrangements; and (vi) moratoriums for creditors. Overall, this provides for a significant improvement, but there are also criticisms, particularly in relation to its applicability to larger forms of restructurings with sovereign and quasi-sovereign companies. The insolvency law appears to be more suited for family-owned businesses, and the concept of ‘trader’ as defined in the law does not appear very fluid. A reconciliation between sovereign entities and commercial entities under the insolvency law umbrella is required in order to provide the required stability and modernism.

Essam Al Tamimi, senior partner at Al Tamimi & Co — speaking at the Hawkamah Judicial and Financial Colloquium on March 18 and 19, 2014, held at the DIFC Conference Center in Dubai and focusing on insolvency — correctly pointed out that “a good bankruptcy law is good for the economy, but whether it is the best solution for cases such as these involving government-linked companies, possibly not. A process outside the bankruptcy law is better but I’m in favor of having a good structured law and not leaving things totally loose.”

The expected introduction of the new insolvency law in UAE is regarded as a very positive development for the country’s future prospects. As already argued above, a lack of clarity in this sector can be very unsettling for businesses and investors alike. Yet it is critical that the implementation of the law operates hand-in-hand with society’s acceptance of the proposed legislation. In this regard, a proactive approach is required to ensure that the population is educated and that the framework is applied consistently and predictably.

Culturally, a wider understanding and acceptance of entrepreneurial collapses must be promoted. After all, several successful entrepreneurs have experienced bankruptcy — often personally — and were able to learn significantly from such experiences. Consideration must be given to legislating for larger conglomerates.

The new laws must be passed soon if the country wants to develop even further. The essence of the question was clearly elucidated by Fabio Scacciavillani, chief economist at the Oman Investment Fund in June. “The essence of a market economy is risk across several dimensions: financial, operational, competition and many more,” he said. “Inevitably, when one of these risks materializes, a company goes bankrupt and the consequences need to be dealt with in the most effective and rapid fashion. A law that follows the best international practices would be a key ingredient for making the business environment in Dubai and the wider region extremely attractive for international investments.”

June 25, 2014 0 comments

Society

Arabs in a pickle jar

by Maya Sioufi June 24, 2014

written by Maya Sioufi

To make pickles, you need to tightly pack cucumbers into a jar, pour in vinegar, add salt and wait for the acid to sink in. Syrian artist Houmam Al Sayed believes Arabs are now being crushed like those cucumbers and the final outcome will taste like nothing but bitterness. That’s the theme he explores in “Pickles”, his current solo exhibition at Beirut’s Mark Hachem Gallery.

Over several large canvases with deformed characters, from shorter legs — representing the inability to move — to shorter arms — symbolizing ineptitude to put them to good use, 33 year old Houmam portrays the handicapped Arab. On one of the largest canvases, the figures have a belt wrapped around their hands, legs or mouth, symbolizing the government hindering people from seeing or speaking freely. “In Syria, we have been wrapped like that for over 50 years,” he says.

Another canvas depicts military boots on the heads of the characters, inspired by an Egyptian demonstration in favor of current president Abdel Fattah al-Sisi during which a man placed an army boot on his son’s head. “In our region, it is either the [Muslim] Brotherhood or the military. There is no right solution; there is no democracy,” Houmam says.

[/media-credit] Wrapped for burial

From Damascus to Beirut

As unrest hit his hometown of Damascus — where he had lived all his life, holding his first exhibition at the age of 18 — it became harder for Houmam to pursue his artistic passion. Galleries closed down and industrial areas were damaged. He had no choice but to leave Syria, and he believes he won’t be able to return for at least another seven years.

Not too long after his move in early 2012, Houmam held his first Beirut exhibition at the Mark Hachem Gallery, introducing himself to the Lebanese public. It was a success, with all the pieces snatched up. They weren’t cheap, either: a two-meter by two-meter canvas had a price tag of approximately $15,000. Since then, heightened demand for his art has enabled him to increase his prices by approximately 50 percent.

Houmam was pleased with the Lebanese public’s understanding of and appreciation for art, something he says the Syrian population was starting to develop a few years prior to the turmoil, as the Ministry of Culture’s grip on the art scene started to loosen and new galleries, such as Ayyam and Tajalliyat, set up shop.

“The Lebanese public has understood art for a long time; they can tell good art from bad art. This makes it easy and hard at the same time,” he says, before adding that this level of appreciation is the greatest benefit of moving to Lebanon. As for the difficulties of being an artist, one of the most significant is the language barrier. After exhibiting his art in Paris in early 2013 and with talks of a show in New York in the not so distant future, Houmam has started taking English lessons to overcome this challenge.

[media-credit id=1966 align=”aligncenter” width=”580″][/media-credit]

Dreaming big

Houmam’s ultimate dream is not to have more of his pieces auctioned off at Christie’s and Sotheby’s — they have already put some of his art under the hammer, selling them for above their estimated price — but to have his paintings hung on the walls of renowned museums. Until then, Houmam will continue depicting that pressured Arab character, the subject of his favorite piece adorning the center of the “Pickles” exhibition. Work on this particular sculpture started in Paris and was completed in Beirut, as producing such a large piece would not have been technically possible in Syria. Houmam’s attachment to it seems to be more than just about its technicality, though. It contains his trademark: the deformed character with a lobotomized brain, alluding to the Arabs’ prohibited thoughts.

“Pickles” will be on exhibition at Beirut’s Mark Hachem gallery until June 30.

June 24, 2014 0 comments